Question

The jeans store sells 7 pairs of jeans per day when it charges $100 per pair. it sells 8 pairs of jeans per day at a price of $90 per pair. the marginal revenue of the eighth pair of jeans is $10. $20. $90. $100.

Answer 1

To solve for the marginal revenue, we are going to find the total amount the store would sell in dollars at 7 pairs and then at 8 pairs. After we find that, we will subtract the difference and receive the marginal revenue of the eighth pair of jeans.

($100)(7) = $700
($90)(8) = $720

$720 - $700 = $20

The marginal revenue is $20.